Benefit Compliance Update: Employer Vax Tracking; Mask Rules; COBRA Q&A & Waste in Healthcare

 Templates, Tools & Legal Notices

Santa Clara County’s New COVID-19 Rules: Employers Must Obtain Vaccination Status, Report Positive Test Results, and Enforce Mask Use - "On May 18, 2021, Santa Clara County, California, issued a health order that both relieves employers of some earlier COVID-19–related requirements and imposes new obligations on employers, particularly with respect to employees’ vaccination status. Santa Clara County also issued the 'Mandatory Directive on Use of Face Coverings' and the 'Mandatory Directive For Unvaccinated Personnel.' The health order and mandatory directives take effect on May 19, 2021. ... All employers are required to obtain and record the vaccination status of all employees by June 1, 2021. The records may consist of an employee’s vaccination card or self-certification of full vaccination. Employers must ask unvaccinated employees about their status every 14 days. Employees who decline to respond 'must … be treated as unvaccinated.'"

Compliance

IRS Issues Guidance Regarding American Rescue Plan Act COBRA Subsidy - “The Notice clarifies that an individual who experiences a special enrollment opportunity that is suspended pursuant to the EBSA Disaster Relief Notice is not eligible for the COBRA premium subsidy if that special enrollment period continues to remain suspended during the ARPA COBRA premium subsidy period. Practically, plan sponsors do not know if an individual is eligible for a special enrollment opportunity for other group health plan coverage, making the need for an opt-in and attestation even more critical to being able to claim the tax credit.”

HHS to Enforce Section 1557 of the Affordable Care Act to Prohibit Discrimination Based on Sexual Orientation and Gender Identity - “The U.S. Department of Health and Human Services (HHS) announced on May 10 that its Office for Civil Rights (OCR) will begin enforcing Section 1557 of the Affordable Care Act to prohibit discrimination based on sexual orientation and gender identity.”

Employers Have 3 Options in Light of OSHA’s Unmasking Announcement - “Responding to a huge looming question for employers, the Occupational Safety and Health Administration (OSHA) just issued an announcement referring businesses to the CDC’s new guidance advising that fully vaccinated people no longer need to wear a mask or social distance in non-healthcare settings. But neither OSHA’s May 17 announcement nor the CDC’s May 13…”

CDC Says Fully Vaccinated Individuals Don’t Need Masks; But Should Employers Change Their Face Covering Requirements? - “CDC issues guidance and not law. While many state and local orders and laws are crafted based on CDC guidance, changes to these orders and laws are often executed days or weeks after CDC guidance is issued, and often feature nuances not seen in the initial CDC guidance…In jurisdictions where COVID-19 health and safety laws no longer require masking or social distancing for fully vaccinated individuals, employers are faced with employment law and practical considerations, including the following…”

ERISA Cybersecurity Lessons for Employers - “The DOL’s best practices guidance includes many specific action points. Several of the DOL’s recommendations are highlighted below…The DOL’s publication of the guidance may indicate that the agency will pay more attention to cybersecurity in future plan audits.”

Have You Been Vaccinated? Your Employer (and Everyone Else) Wants to Know - “We provide some guidance below regarding vaccine verification and some considerations for employers thinking about instituting vaccine policies.”

Potential ERISA Fiduciary Duty Issues with BCBSA $2.67 Billion Settlement - “Under ERISA, any portion of the settlement proceeds that are considered to be “plan assets” must be used for the exclusive benefit of participants in the plan (and their beneficiaries), or to defray the reasonable administrative expenses of the plan. Given the size of the settlement, we are hopeful that the Department of Labor (“DOL”) will issue guidance on these fiduciary duty issues.”

Gifts and bonuses in exchange for vaccination could violate the law - “Employers considering a vaccine incentive program should use caution, delaying if possible, for clearer guidance. However, if a program is moving forward, employers must make the program voluntary, should keep any incentives small in value, offer accommodations for medical exceptions and religious beliefs, and offer non-monetary or in-kind incentives to avoid violations.”

California OSHA Issues Frequently Asked Questions to Clarify Guidance for Vaccinated Employees - “The new guidance provides that employers can now follow the California Department of Public Health (CDPH) COVID-19 Public Health Recommendations for Fully Vaccinated Individuals. CDPH guidance states that fully vaccinated employees must be excluded from the workplace only when there have been COVID-19 cases at the worksite (or they have had a COVID-19 exposure) and they show symptoms of COVID-19.”

Benefit News

25% of Healthcare is Wasted in the U.S. - "A review of articles published in the New England Journal of Medicine determined that one-third of 'established medical practices … are found to be no better than a less expensive, simpler, or easier therapy or approach.' Another study estimated that 25% of all healthcare spending from 2012 to 2019 was wasted."

Are Employer-Sponsored Health Plans on Their Way Out? - The history of why we get our benefits from employers dates back to WWII, when companies began using healthcare as a means to attract talent, particularly women. While employer-sponsored health insurance has been the norm ever since, it is clear that consumers’ needs have shifted. One-size-fits-many coverage may no longer cut it for Americans with heightened expectations and diverse health concerns. Going forward, we may see employer-sponsored health insurance going the way of pension plans. Consumers are showing they’re ready for the change, with data revealing that 41% of consumers say they think health insurance should be decoupled from employment. As business leaders look ahead to the next couple of years, we have an opportunity to meet the moment and reimagine what health insurance looks like, and what incentives companies should offer to attract the best talent.

On Armstrong & Getty re: Congress' Rampant Dishonesty in Budgeting and Medicare

Medicare for All?  

Medicare for More?  

We can't even afford Medicare for some ...  

 For more on this topic see Stupid Budget Tricks - Government Healthcare Edition.

Benefit News Clips, Week of May 14th

The Littler® Annual Employer Survey Report

May 12, 2021 – Littler Mendelson P.C.

Excerpt: “While 71 percent of employers surveyed believe that most of their employees who can work remotely prefer a hybrid model and that only 4 percent prefer full-time in-person work, 28 percent of those employers plan to have most employees return full time and in person, and 55 percent will offer a hybrid model (i.e., a mix of remote and in-person work). Only 7 percent say their employees who are able to work remotely full time can continue to do so if they wish, despite 16 percent saying they believe most would prefer this option.”

 

Potential ERISA Fiduciary Duty Issues with BCBSA $2.67 Billion Settlement

May 12, 2021 – Miller, Johnson, Snell & Cummiskey, P.L.C.

Excerpt: “Employers that file a claim and receive settlement proceeds may need to determine what portion of the settlement proceeds are considered plan assets under ERISA, especially since we anticipate that only a minority of employees will make an individual claim. With a settlement fund of $2.67 billon, some employers may receive a significant amount from the settlement fund. As a result, we are hopeful that the DOL will provide guidance on the proper use of the settlement funds received by employers under ERISA in this specific lawsuit.”

 

Gifts and bonuses in exchange for vaccination could violate the law

May 11, 2021 – The Hill

Excerpt: “Employers considering a vaccine incentive program should use caution, delaying if possible, for clearer guidance. However, if a program is moving forward, employers must make the program voluntary, should keep any incentives small in value, offer accommodations for medical exceptions and religious beliefs, and offer non-monetary or in-kind incentives to avoid violations.”

 

IRS Announces 2022 Limits for Health Savings Accounts, High-Deductible Health Plans and Excepted Benefit HRAs

May 11, 2021 – McDermott Will & Emery

Excerpt: “The table below compares the applicable dollar limits for HSAs, HDHPs and excepted benefit HRAs for 2021 and 2022.”

 

Your State No Longer Requires Face Coverings in the Workplace – But Should You Continue To Mandate Them?

May 10, 2021 – Fisher & Phillips LLP

Excerpt: “This is a particular concern in states like Texas, Florida, Georgia, and Mississippi, where the state has eased COVID-19 related restrictions, but the federal government has jurisdiction over workplace safety through OSHA. Other states where the state government has jurisdiction over workplace safety – like Virginia, Michigan, Oregon and California – have adopted their own COVID-19 OSHA standards, which include additional heightened mandates for employers in the workplace.”

 

Looming Federal Paid Leave Legislation Raises Important Questions for Employers Over Funding

May 7, 2021 – HR Policy Association

Excerpt: “With Congress mulling multiple paid family leave legislative proposals and a federal paid leave program seemingly on the horizon, questions remain regarding the best approach to how such a program—likely to be a UI-type insurance program—would be funded: through a payroll tax or general revenue?”

California OSHA Issues Frequently Asked Questions to Clarify Guidance for Vaccinated Employees

On May 5, 2021, California’s Occupational Safety and Health Administration (Cal/OSHA) issued answers to frequently asked questions (FAQs) to address employer concerns about what to do with fully vaccinated employees during a COVID-19 exposure incident at the workplace. This guidance reconciles differences between the emergency temporary standard (ETS) and guidance published by the U. S. Centers for Disease Control and Prevention (CDC) concerning fully vaccinated employees. Prior to this guidance, the ETS required employers to remove and quarantine fully vaccinated employees from the workplace whenever there was a confirmed positive COVID case at the worksite. In contrast, the CDC guidance provided if the fully vaccinated employee was asymptomatic there was no need for removal or quarantine.

New Guidance

The new guidance provides that employers can now follow the California Department of Public Health (CDPH) COVID-19 Public Health Recommendations for Fully Vaccinated Individuals. CDPH guidance states that fully vaccinated employees must be excluded from the workplace only when there have been COVID-19 cases at the worksite (or they have had a COVID-19 exposure) and they show symptoms of COVID-19.

Employers should follow Executive Order N-84-20 and the CDPH guidance when excluding or quarantining fully vaccinated employees from work.

Impact on Employers

Employers should become familiar with the new FAQs, the CDPH recommendations and all applicable executive orders before they exclude or quarantine fully vaccinated employees from the workplace. 

In addition, an employer should note that while CDPH guidance provides specific guidelines for workplace settings, employers must still follow the ETS requirements related to other COVID-19 issues, such as employee face coverings, social distancing and testing parameters.  

This post is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.  

HSA/HDHP Limits Increase for 2022

The following chart shows the HSA and HDHP limits for 2022 as compared to 2021. It also includes the catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older, which is not adjusted for inflation and stays the same from year to year.  

Friday's Benefit and Compliance Clips

Compliance

Blue Cross Blue Shield Settlement: “If your company had an administrative services agreement with a Blue Cross Blue Shield (BCBS) licensee in the past six years or a health insurance policy with a BCBS licensee in the past 13 years, your company may benefit from the settlement of a court case…”

COBRA Subsidy: You’ve Got Questions … We’ve Got Answers: “Q2 - An employee was fired for poor performance last year. The employee went to another company, but his employment was recently terminated for poor performance. Which company is required to send COBRA notices and offer fully subsidized COBRA?”

American Rescue Plan: How to Navigate New Continuation Coverage Standards for COBRA: “Should the tax credit exceed the relevant tax liability, the excess is refundable to the employer. Additionally, the whole credit (including the refundable portion) may be advanced to the employer.”

Understanding Time Off From Work Obligations For COVID-19 Vaccinations: “Employers considering pay obligations for time off from work for COVID-19 vaccination should also consider state and local paid sick leave laws which may cover time off for preventative care that would include vaccinations.”

Your Employees Are Vaccinated – Now What? “May we disclose the vaccination status of my workforce?...What should we do if clients or customers demand they receive service from only vaccinated employees?...What safety measures can be adjusted now that employees are vaccinated? Can we relax masking requirements?”

Benefit News

California Mulls Letting Adults Add Parents To Health Plans: "California could become the only state to let adult children add their parents as dependents to their health insurance plans, a policy proposal aimed at increasing insurance coverage among low-income people living in the country illegally who aren’t eligible for government-funded coverage. ... But business groups say adding lots of older people to their large group insurance plans will just drive up their already skyrocketing premium costs. Employer premiums would increase between $200 million and $800 million per year, depending on how many people sign up. The result, they say, would be higher health care costs for everyone."

Woman's Insane Hospital Bill Goes Viral on Twitter: "her surgery [to remove fibrous tumor cells from a particularly fragile region of the brain] plus her hospital stay—cost an eye-popping, jaw-dropping $476,025.98. While her insurance mercifully covered $475,365.98 of the bill, she was on the hook for the remaining $660, much to her frustration."

The Health Problem Congress Created And Cannot Solve: "For the past 70 years, premiums paid by an employer have been tax-free to the employee. From time to time, individual purchases have benefited from one tax break or another, but they have never been treated as generously as insurance obtained at work. Even though Blue Cross group insurance might be identical to Blue Cross individual insurance, the tax law encourages us all to prefer the former to the latter. All we need is an accommodating employer to pay non-taxed premiums instead of additional taxable wages. Competition for labor ensures that virtually all employers of any size are more than willing to do that – even though most employers these days would rather not be involved in health care matters at all."

The One Itty-Bitty, Teeny-Weeny Problem with the Plan to Expand Medicare. It'll Be Very Expensive. "A male worker who made the median income his entire working career and retired at age 65 in 2020 can expect to receive from Social Security just about what he paid in. However, while he paid $81,000 in Medicare (Part A) payroll taxes, he is likely to receive $240,000 (net of premiums) in lifetime Medicare benefits. Lowering the enrollment age to 60 adds perhaps another $25,000 to $30,000 to that deficit. And that's just for a single person. Consider a married couple with only one low-wage earner. That worker retiring at age 65 in 2020 paid about $36,000 in Medicare taxes, which qualifies both of them to participate in Medicare. But the couple can expect to receive about $522,000 in Medicare benefits."